Oil prices fall as investors weigh supply outlook, Middle East tensions

Business Recorder reported that oil prices slipped early on Thursday, with Brent down $1.39, or 1.31 per cent, to $104.67 a barrel by 0116 GMT. West Texas Intermediate fell $1.02 to $94.07, erasing the previous session's gains. Investors were weighing the danger to supplies from attacks near the Strait of Hormuz, set against a possible US move to ease sanctions on shadow fleet tankers.

WTI had climbed to a three-week high the day before after Houthi forces struck Saudi Aramco's headquarters and Iran pledged new methods to target ships near Hormuz. On Wednesday, maritime officials said a container ship and a dry bulk carrier both went down near the strait within 24 hours after projectile hits. Iran has said it is escalating strikes as a reply to Washington's port blockade and sanctions introduced last month, and attacks have risen sharply over the past 10 days.

Supply has been cushioned by rising output from Russia and Middle Eastern producers. The International Energy Agency said Russian output rose to 8.43 million bpd in September, though it stayed 870,000 bpd below a year earlier. Gulf crude exports from the Middle East jumped 4.4 million bpd during September, reaching close to three-quarters of levels seen before the conflict. In the US, crude inventories dropped by 11.1 million barrels in the week to October 9, a far steeper decline than analysts surveyed by Reuters had predicted, yet prices showed little reaction.